Ask Terry Questions Retiring at age 81

Retiring at age 81

By Terry Savage on October 24, 2024 | Financial Planning / Retirement

I. Work for a large sporting good co and have a LLC 401K plan. I will probably retire at first
Of year. I am 81yrs old. It’s not a large amount $25,000. What should my next step be?
Go to a Roth ? Stay with VOYA? My wife has a Roth 401K trying not to have to pay tax
On it if I can

Terry Says

Well, first, could I congratulate you on your longevity at work. How great that you have been able to be actively working and contributing to a retirement plan all these years!

Now, here’s something important. Since you are older than 73, but still working, you weren’t required to take minimum distributions from your plan every year. That will change next year when you are retired.

You can leave your money in your current 40l(k) plan, and ask them to calculate your RMD each year. Or you could roll the entire plan amount directly to Vanguard or Fidelity and let them tell you about the RMDs. Read THIS ARTICLE on how to do that.

Now WHY would you want to do a rollover? At this stage of life, you don’t want to lose any of this retirement savings. But most 40l(k) plans have investment choices designed for younger workers, who should be investing in the stock market over the long run. Your long run is shorter!

So if you do a direct rollover to FIDELITY or VANGUARD as described in the linked article, you could have them put all the money in a short-term money market fund. You won’t have any gains– but you won’t have any losses. And they will calculate your required distribution every year.

Enjoy retirement!

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